Carbon cap-and-trade will cripple economy

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With support from the Obama administration, leading Democrats on the House Energy and Commerce Committee have introduced a bill that would establish the country’s first-ever curb on carbon dioxide emissions from the burning of fossil fuels.

It is a remarkable paradox: At a time when productivity gains combined with new energy-efficient technologies are increasing the global competitiveness of U.S. merchandise, the plan to curb carbon dioxide emissions will have the opposite effect.

It will drive up energy costs significantly and slow our economy, while allowing developing countries to make massive amounts of money by selling their emission credits.

The most destructive effect of a carbon cap-and-trade scheme would be a severe blow to U.S. competitiveness. Among the hardest-hit industries would be chemical and paper companies, steel mills, oil refineries and aluminum and cement manufacturers. Many companies would move production to countries with limited carbon controls or none at all. The cost in dollars and forfeited jobs and revenue would be huge.

The push for carbon controls coincides with international negotiations that are under way on a new treaty on climate change. The objective is a new treaty by December. Government leaders are arguing for binding targets and timetables that would require the United States and other industrialized countries to reduce carbon dioxide emissions by roughly 40 percent by 2030 and 80 percent by 2050.

But many scientists – myself included – question the adequacy and reliability of data on which governments rely. Given the imprecision and large uncertainties of computer models of today’s climate, how can governments place trust in models of the climate 50 to 100 years from now?

Apart from the highly exaggerated fears of global warming, a cap-and-trade system – which is essentially a carbon tax – would be a strategic mistake.

It would cost Americans millions of jobs and wreak havoc on energy-intensive industries. Because power plants fueled by coal supply more than half of the country’s electricity, and no technology for capturing carbon dioxide is commercially available, households and businesses would pay significantly more for electricity.

A study done for the George C. Marshall Institute estimates that cap-and-trade would cost the average American household $1,437 annually by 2015, rising to $1,979 in 2030 and $2,979 in 2050.

There is another problem. Developing countries will produce the majority of carbon dioxide emissions in coming years. According to the International Energy Agency, as much as 85 percent of the projected increase in man-made global emissions of carbon dioxide will come from developing countries.

Take China. As its share of world industrial output rises, China will become the world’s largest source of carbon dioxide, releasing into the atmosphere nearly double the amount the United States emits and more than triple what Europe discharges.

Yet China and other developing countries have refused to restrain their emissions. If they’re let off the hook, China, India, Brazil and other exempted countries will reap an instant trade advantage.

Now is the time for Congress to speak out against any proposed reductions in energy consumption that carry huge costs in jobs and business failures. The simple fact is that there are huge scientific uncertainties regarding CO2 emissions, including the growing possibility they have little to do with the climate. Questions remain over what constitutes dangerous levels of emissions. Crippling our economy shouldn’t be a mitigating option.